XML 51 R14.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Goodwill and Purchased Intangible Assets | 6 Months Ended
--- | ---
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND PURCHASED INTANGIBLE ASSETS | NOTE 7 – GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the current and prior business combinations. We have four reportable segments and six reporting units. For additional details, refer to Note 18, “Segment Reporting and Geographic Information” of the Condensed Consolidated Financial Statements. The following table presents goodwill carrying value and the movements during the six months ended December 31, 2019(1):
(In thousands) |  | Wafer Inspection and Patterning |  | Global Service and Support (“GSS”) |  | Specialty Semiconductor Process |  | PCB and Display |  | Component Inspection |  | Total
Balance as of June 30, 2019 |  | $ | 360,615 |  |  | $ | 25,908 |  |  | $ | 821,842 |  |  | $ | 989,918 |  |  | $ | 13,575 |  |  | $ | 2,211,858 |
Acquired goodwill |  | 54,001 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 54,001 |
Goodwill adjustments |  | — |  |  | — |  |  | — |  |  | 33,968 |  |  | — |  |  | 33,968 |
Foreign currency adjustments |  | (46 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (46 | )
Balance as of December 31, 2019 |  | $ | 414,570 |  |  | $ | 25,908 |  |  | $ | 821,842 |  |  | $ | 1,023,886 |  |  | $ | 13,575 |  |  | $ | 2,299,781 |
_________________
(1) | No goodwill was assigned to the Other reporting unit, and accordingly was excluded in the table above.
As of December 31, 2019, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the qualitative assessment performed in the third and fourth quarters of the fiscal year ended June 30, 2019. Goodwill is not subject to amortization but is tested for impairment on an annual basis during the third fiscal quarter or whenever events or changes in circumstances indicate the carrying amount of these assets may not be recoverable. Events or changes in circumstances that could affect the likelihood that we will be required to recognize an impairment charge for goodwill include, but are not limited to, declines in our stock price or market capitalization, declines in our market share, and declines in revenues or profits at our reporting units. Any impairment charges could have a material adverse effect on our operating results and net asset value in the quarter in which we recognize the impairment charge. For additional details, refer to Note 7 “Goodwill and Purchased Intangible Assets,” of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019. The next annual assessment of goodwill by reporting unit is scheduled to be performed in the third quarter of the fiscal year ending June 30, 2020. Purchased Intangible Assets The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands) |  |  | As of December 31, 2019 |  | As of June 30, 2019
Category | Range of Useful Lives (in years) |  | Gross Carrying Amount |  | Accumulated Amortization, and Impairment |  | Net Amount |  | Gross Carrying Amount |  | Accumulated Amortization and Impairment |  | Net Amount
Existing technology | 4-8 |  | $ | 1,251,282 |  |  | $ | 268,785 |  |  | $ | 982,497 |  |  | $ | 1,224,629 |  |  | $ | 196,582 |  |  | $ | 1,028,047 |
Customer relationships | 4-9 |  | 305,017 |  |  | 82,488 |  |  | 222,529 |  |  | 297,250 |  |  | 66,471 |  |  | 230,779 |
Trade name / Trademark | 4-7 |  | 117,133 |  |  | 32,094 |  |  | 85,039 |  |  | 114,573 |  |  | 25,052 |  |  | 89,521 |
Backlog and other | <1-9 |  | 50,405 |  |  | 38,555 |  |  | 11,850 |  |  | 43,969 |  |  | 19,146 |  |  | 24,823 |
Intangible assets subject to amortization |  |  | 1,723,837 |  |  | 421,922 |  |  | 1,301,915 |  |  | 1,680,421 |  |  | 307,251 |  |  | 1,373,170 |
In-process research and development |  |  | 190,635 |  |  | 100 |  |  | 190,535 |  |  | 187,500 |  |  | — |  |  | 187,500 |
Total |  |  | $ | 1,914,472 |  |  | $ | 422,022 |  |  | $ | 1,492,450 |  |  | $ | 1,867,921 |  |  | $ | 307,251 |  |  | $ | 1,560,670 |
Purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Events or changes in circumstances that could affect the likelihood that we will be required to recognize an impairment charge for the purchased intangible assets primarily include declines in our operating cash flows from the use of these assets. Any impairment charges could have a material adverse effect on our operating results and net asset value in the quarter in which we recognize the impairment charge. The change in the gross carrying amounts of intangible assets is due to acquisition of certain assets and liabilities of privately-held companies. For additional details, refer to Note 6 “Business Combinations” of the Condensed Consolidated Financial Statements. Amortization expense for purchased intangible assets for the periods indicated below was as follows:
| Three Months Ended |  | Six Months Ended
| December 31, |  | December 31,
(In thousands) | 2019 |  | 2018 |  | 2019 |  | 2018
Amortization expense - Cost of revenues | $ | 36,364 |  |  | 968 |  |  | $ | 71,985 |  |  | $ | 1,858 |
Amortization expense - Selling, general and administrative | 20,257 |  |  | 343 |  |  | 42,513 |  |  | 887 |
Amortization expense - Research and development | 131 |  |  | — |  |  | 162 |  |  | — |
Total | $ | 56,752 |  |  | $ | 1,311 |  |  | $ | 114,660 |  |  | $ | 2,745 |
Based on the purchased intangible assets gross carrying amount recorded as of December 31, 2019, the underlying assets, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal year ending June 30: | Amortization (In thousands)
2020 (remaining 6 months) | $ | 104,770 |
2021 | 194,901 |
2022 | 192,323 |
2023 | 191,232 |
2024 | 188,714 |
2025 and thereafter | 429,975 |
Total | $ | 1,301,915 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration